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Why TripAdvisor Soared 37% in November

By Andrew Tseng – Dec 8, 2020 at 4:36PM

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Travel conditions have been slowly improving and effective vaccines would help even more.

What happened

Shares of TripAdvisor (TRIP -2.07%) soared 36.6% in November, according to data from S&P Global Market Intelligence. That move sent the online travel stock from $19 per share to $26 during the month.

For context, TripAdvisor shares are now down only 14% for the year through November after being down over 50% in March due to the COVID-19 pandemic.

TripAdvisor reported an encouraging third-quarter earnings report in early November. The company has been in the eye of the storm this year due to the unprecedented decline in global travel driven by the COVID-19 pandemic. For example, in the second quarter, TripAdvisor's revenue dropped an almost unbelievable 86% year over year.

But travel activity has slowly improved throughout this year. The company's third-quarter revenue fell 65% year over year.

The encouraging news in November from Pfizer and BioNTech as well as Moderna about the positive safety and efficacy of their COVID-19 vaccines also drove up the stocks of several travel-related businesses.  

A woman walks in an airport dragging a suitcase on wheels.

Image source: Getty Images.

So what

TripAdvisor's business appears to be slowly improving from the lows seen earlier this year. While a 65% revenue decline versus the year-ago quarter is still dreadful performance, it is moving in the right direction.

And if the COVID-19 vaccines prove effective against COVID-19 in the real world, travel-related businesses like TripAdvisor could see a meaningful recovery.

Now what

While TripAdvisor shares have surged recently due to these developments, investors should consider the shares as one way to bet on a recovery in global travel.

Andrew Tseng has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends TripAdvisor. The Motley Fool has a disclosure policy.

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